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Efforts by House lawmakers at crafting a bipartisan compromise to pass legislation on the contentious issue of net neutrality have derailed, very likely quashing the prospects for any bill on the subject this session.

Rep. Henry Waxman (D-Calif.), the chairman of the Energy and Commerce Committee, announced late Wednesday that Republican members had withdrawn support for the compromise bill he had been shopping around the committee, revisiting the partisan fissure that has characterized the debate over net neutrality for more than half a decade.

"This legislative initiative was predicated on going forward only if we had full bipartisan support in our committee," Waxman said in a statement.

Waxman had been working with Republican committee leaders, including Joe Barton (Texas), the ranking member of the Energy and Commerce Committee, and Cliff Stearns (Fla.), the ranking member of the Internet subcommittee, along with industry members and advocacy groups on both sides of the issue.

Barton explained the withdrawal of Republican support as the result of lingering concerns over vesting the Federal Communications Commission with regulatory authority over Internet service providers, a scenario net neutrality opponents say threatens to undermine the growth of a vibrant sector of the economy.

"I have consulted with Republican leadership and members of the Energy and Commerce Committee, and there is a widespread view that there is not sufficient time to ensure that Chairman Waxman's proposal will keep the Internet open without chilling innovation and job creation," Barton said in a statement.

He reiterated opposition to a proposal FCC chairman Julius Genachowski floated earlier this year to reclassify broadband as a telecommunications service, a move he proposed following a court ruling earlier this year. Genachowski had argued that reclassification was a needed step for the FCC to clarify its legal authority to proceed with key elements of its broadband agenda.

Cable and phone companies vehemently opposed the move, and critics pounced on the proposal as an executive power grab that skirted congressional authorization. A majority of members of Congress -- from both sides of the aisle -- objected to the FCC reclassifying broadband service without legislative authorization.

But Waxman's proposal would have explicitly barred the FCC from reclassifying broadband service for two years, a move offered as a concession to the cable and phone industries and their political allies, though Waxman had previously spoken out in favor of Genachowski's proposal.

While it would have taken reclassification off the table, the bill would have authorized the FCC to enforce civil penalties against service providers found to be blocking lawful transmissions or from unreasonably discriminating against specific types of content.

In that sense, Waxman explained that he was pushing a compromise that would have given specific authorization to the FCC to take action against service providers for playing favorites with the traffic traveling on their networks, a power that a federal appeals court ruled the commission did not possess in the April ruling vacating a 2008 FCC order punishing Comcast for secretly blocking peer-to-peer traffic.

The bill also would have directed the FCC to set transparency rules for ISPs to provide notice about pricing, speeds and how they manage their networks. It also would have barred wireless providers from blocking websites and certain competing services, such as VoIP applications like Skype.

"This development is a loss for consumers and a gain only for the extremes," Waxman said. "We need to break the deadlock on net neutrality so that we can focus on building the most open and robust Internet possible."

Barton reiterated his party's objections to any measure that could be construed as an effort to "regulate the Internet," and indicated that he would only be open to a more targeted bill that would only block the FCC from reclassifying broadband service.

Stifel Nicolaus analyst Rebecca Arbogast said that Republican withdrawal of support for the compromise could be a setback for the cable and phone companies, as it might invite the FCC to act on its own to reclassify broadband, a scenario they hoped to avoid by hammering out a legislative compromise. But now that talks have broken down, the FCC will very likely be left to its own devices on the broadband front, at least until the next session of Congress.

"It's possible the legislative debate could continue in a lame duck session after the November election, though we're skeptical," Arbogast wrote in a research note.

Waxman was only slightly more optimistic.

"Cooler heads may prevail after the elections. But I want my position to be clear -- my goal is the best outcome for consumers," he said. "If our efforts to find bipartisan consensus fail, the FCC should move forward under Title II. The bottom line is that we must protect the open Internet. If Congress can't act, the FCC must."

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